- Bank of Japan October 31 Statement - full text
- USD/JPY jumped back to 150 on the Bank of Japan statement
- Bank of Japan Monetary Policy Statement: Changes language around 1% 10year JGB cap
- JPMorgan Securities Japan expects BOJ to start tweaking policy in 2024, remove YCC first.
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- China Oct PMIs: Manufacturing 49.5 (expected 50.2) Non-manufacturing 50.6 (expected 51.8)
- PBOC sets USD/ CNY mid-point today at 7.1779 (vs. estimate at 7.3024)
- HSBC CEO says the worst has passed for China's real estate implosion
- Japan PM Kishida says won't comment on media reports of BOJ JGB 10 year decision due today
- Australian September Private Sector Credit +0.5% m/m (expected +0.3%)
- BRC data shows UK shop price inflation at lowest since August 2022
- Lloyds Bank Business confidence measure hits second-highest level of 2023: 39% (prior 36%)
- Japan's JGB 10 year yiedl hits 0.955%, highest since May 2013
- New Zealand October business confidence 23.4% (prior 1.5%)
- Japan Sept. data: Preliminary Industrial Production +0.2% m/m (expected 2.5%)
- JP Morgan are looking at 3 factors that'll trigger an S&P500 short squeeze
- Japan data: September unemployment rate 2.6% (expected 2.6%)
- Bank of America expect the BOJ to allow the 10 year JGB yield ceiling to rise to 1.5%
- Australia data - ANZ Roy Morgan weekly consumer confidence 75.0 (prior 78.2)
- Morgan Stanley analyst says the chance of a Q4 S&P 500 rally has fallen considerably
- New Zealand September Building Approvals data: -4.7% m/m (prior -7.0%)
- CHF ICYMI: Swiss National Bank to scrap interest paid on minimum reserves (ECB to follow?)
- Brent crude - World Bank still warning that oil prices could reach US$150 a barrel
- ICYMI: BOJ set to allow 10-yr Japanese government bond yields to rise above 1% ('sources')
- BOC's Macklem: Low growth, higher rates will impact the government budget
- Forexlive Americas FX news wrap: USD/JPY sinks ahead of the BOJ decision
- Trade ideas thread - Tuesday, 31 October 2023
USD/JPY retraced much, but not all, of its overnight move lower in the lead-up to the Bank of Japan statement. The USD traded a touch higher against other major FX also. The yield on the 10 year JGB approached 1.0% ahead of the statement, following the Nikkei report on Monday, US time, that the BOJ would extend the yield tolerance limit to 1.5%.
The Bank of Japan Statement made a minor tweak to policy, that the 1% cap for 10-year JGB yields was set more formally in place, from 0.5% previously. The 1.5% cap mooted by the Nikkei did not come to fruition. USD/JPY was marked higher, back to 150 on the announcement. With added flexibility to the JGB cap the BoJ is looking to hold ultra easy policy in place for still some time to come.
Check out the post on the Statement above, the summary points contain revisions made to the bank’s forecasts for inflation ahead, higher;
- core CPI fiscal 2023 median forecast at +2.8% vs +2.5% in July
- core CPI fiscal 2024 median forecast at +2.8% vs +1.9% in July
- core CPI fiscal 2025 median forecast at +1.7% vs +1.6% in July
How the Bank of Japan explained the 1% cap:
